Standards Database Logo
Home | Browse | Search | Purpose | History | Process | Acknowledgment| Reference

 


 


Topic: Economic incentives 

Economics

 Standard 1.  Understands that scarcity of productive resources requires choices that generate opportunity costs
  Level IV (Grade 9-12)
   Benchmark 3.Understands that increases in productivity are affected by incentives that reward successful innovation and investments (e.g., in research and development, and in physical and human capital)
    Knowledge/skill statements
     1.Understands that incentives can bring about increases in productivity
     2.Knows that incentives reward successful innovation and investment in areas such as research and development
     3.Knows that incentives reward successful innovation and investment in areas such as physical capital
     4.Knows that incentives reward successful innovation and investment in areas such as human capital
 Standard 2.  Understands characteristics of different economic systems, economic institutions, and economic incentives
  Level II (Grade 3-5)
   Benchmark 1.Knows that people's choices and behavior are influenced by positive incentives (i.e., rewards that make people better off) and negative incentives (i.e., penalties that make people worse off)
    Knowledge/skill statements
     1.Knows that people‚Äôs choices and behaviors are influenced by positive incentives
     2.Knows that people’s choices and behaviors are influenced by negative incentives
     3.Knows that a positive incentive is a reward that makes people better off
     4.Knows that a negative incentive is a penalty that makes people worse off
   Benchmark 2.Knows that because people's views of rewards and penalties are different, the influence of an incentive can vary with the individual
    Knowledge/skill statements
     1.Knows that people view rewards and penalties differently
     2.Knows that the influence of an incentive can vary with the individual
   Benchmark 3.Understands that the hope of earning profit (i.e., the difference between revenues and the costs of producing or selling a good or service) is the incentive that persuades entrepreneurs and business firms to take the risks of producing goods and services to sell
    Knowledge/skill statements
     1.Knows that the hope of earning a profit is an incentive for entrepreneurs and business firms
     2.Knows that profit is the difference between revenues and the costs of producing or selling a good or service
     3.Understands that the hope of earning a profit persuades entrepreneurs and business firms to take the risks of producing goods and services to sell
  Level III (Grade 6-8)
   Benchmark 1.Understands that employers are willing to pay wages and salaries to workers because they expect to sell the goods and services those workers produce at prices high enough to cover the wages and salaries and all other costs of production
    Knowledge/skill statements
     1.Understands that employers pay wages and salaries to workers because they expect to sell the goods and services those workers produce
     2.Understands that employers expect to sell the goods and services that workers produce at prices high enough to cover wages and salaries of the workers
     3.Understands that employers expect to sell the goods and services that workers produce at prices high enough to cover all costs of production
   Benchmark 6.Understands that economic incentives such as wanting to acquire money or goods and services and wanting to avoid loss are powerful forces affecting the way people behave
    Knowledge/skill statements
     1.Understands that economic incentives affect the way people behave
     2.Knows that the desire to acquire money, goods, or services is a powerful incentive
     3.Knows that the desire to avoid loss is a powerful incentive
   Benchmark 7.Understands that entrepreneurs respond to incentives such as profits, the opportunity to be their own boss, the chance to achieve recognition, the satisfaction of creating new products, and disincentives such as losses and the responsibility, long hours, and stress of running a business
    Knowledge/skill statements
     1.Understands that entrepreneurs respond to incentives
     2.Understands that profit is an incentive to which entrepreneurs respond
     3.Understands that self-employment is an incentive to which entrepreneurs respond
     4.Understands that recognition is an incentive to which entrepreneurs respond
     5.Understands that the satisfaction of creating new products is an incentive to which entrepreneurs respond
     6.Understands that entrepreneurs respond to disincentives
     7.Understands that loss is a disincentive to which entrepreneurs respond
     8.Understands that responsibility is a disincentive to which entrepreneurs respond
     9.Understands that long work hours are a disincentive to which entrepreneurs respond
     10.Understands that the stress of running a business is a disincentive to which entrepreneurs respond
  Level IV (Grade 9-12)
   Benchmark 4.Knows that property rights, contract enforcement, standards for weights and measures, and liability rules affect incentives for people to produce and exchange goods and services
    Knowledge/skill statements
     1.Knows that property rights affect incentives for people to produce and exchange goods and services
     2.Knows that contract enforcement affects incentives for people to produce and exchange goods and services
     3.Knows that standards for weights and measures affect incentives for people to produce and exchange goods and services
     4.Knows that liability rules affect incentives for people to produce and exchange goods and services
   Benchmark 5.Understands that in every economic system consumers, producers, workers, savers, and investors respond to incentives in order to allocate their scarce resources to obtain the highest possible return, subject to the institutional constraints of their society
    Knowledge/skill statements
     1.Understands that in every economic system consumers are subject to the institutional constraints of their society
     2.Understands that in every economic system consumers respond to incentives in order to allocate their scarce resources to obtain the highest possible return
     3.Understands that in every economic system producers respond to incentives in order to allocate their scarce resources to obtain the highest possible return
     4.Understands that in every economic system workers respond to incentives in order to allocate their scarce resources to obtain the highest possible return
     5.Understands that in every economic system savers respond to incentives in order to allocate their scarce resources to obtain the highest possible return
     6.Understands that in every economic system investors respond to incentives in order to allocate their scarce resources to obtain the highest possible return
     7.Understands that in every economic system producers are subject to the institutional constraints of their society
     8.Understands that in every economic system workers are subject to the institutional constraints of their society
     9.Understands that in every economic system savers are subject to the institutional constraints of their society
     10.Understands that in every economic system investors are subject to the institutional constraints of their society